South Australia energy security target may exclude battery storage

South Australia rules out “synthetic inertia” – and therefor battery storage – in its energy security target, in a move that could have huge implications for the owners and developers of current and upcoming wind and solar projects in the state.

The South Australian government has outlined further details of its proposed energy security target and, contrary to expectations, it looks like it will exclude battery storage and make solar and wind farms paired with the technology ineligible to receive credits.

The move could have serious implications for wind and solar farm developers and owners in the state, given the restrictions it is likely to impose on output as the state seeks to limit the amount of “non dispatchable” generation. It may also result in higher electricity prices, given that storage is considered by many to be cheaper than gas.

The EST was unveiled in March, along with special powers for the energy minister Tom Koutsantonis and a new emergency back-up gas generator, as part of the state government’s response to the latest rolling blackouts, which it blamed on bad management by the market operator, and the fact that one big gas unit sat idle while 90,000 consumers lost power.

The EST is designed to ensure that 36 per cent of South Australia’s electricity demand is met through local “clean” but dispatchable generation, rising to 50 per cent by 2050. That equates to 4,500 gigawatt hours in 2017/18 and 6,000GWh from 2025.

It was thought that battery storage – which could be added to many of these new projects, and many existing wind farms – would be allowed under the new legislation, which will assign credits – worth up to $50/MWh – for technology meeting that target.

But the draft legislation defines the “accredited generators” as being only those that can provide “real inertia” and “fault current”.

Battery storage can provide both inertia and fault current, but in the terminology used in the industry it is known as “synthetic inertia.” Asked for a clarification about the eligibility of battery storage, a spokesman for Koutsantonis replied in an emailed statement: “Not if that storage provides synthetic inertia.”

In an accompanying statement, Koutsantonis said that battery storage was being incentivised through the $150 million Renewable Technology Fund.

The state has already called for expressions of interest for 100MW/MWh of battery storage under that program, and received more than 90 responses. Its next move, and presumably a formal tender to get the technology installed by next summer, will be announced soon.

But the exclusion of battery storage and “synthetic inertia” from the EST is sure to create controversy – and much debate over the definition of inertia.

“I think the chemical stored energy is as real a source of kinetic energy (in the form of potential shaft angular momentum ) as you can imagine,” said the head of Australian operations of one international battery storage company. “This is real power that we can provide from the BESS (battery energy storage system).”

There is also questions about why some peaking gas plant – which is apparently accredited under this draft legislation – should be eligible, considering that there is much debate about how much inertia they actually do provide.

It is not the first time questions have been raised about the scheme, designed by Frontier Economics’ Danny Price, who is also the architect of the proposed national emissions intensity scheme , and whose research has in the past been used by the fossil fuel lobby to argue against the renewable energy target.

When first unveiled, Zen Energy chairman Ross Garnaut queried Koutsantonis and Price about the then requirement of eligible generation to provide “synchronous generation,” which appeared to privilege the roles of the old fossil fuel technologies, and so limit the expansion of renewable energy.

“Was the objective to secure a large role for gas generation”, Professor Garnaut asked “Or was the objective to stabilise the electricity grid and market alongside expansion of renewables? If the latter, presumably alternative non-synchronous sources of frequency control ancillary services and inertia, like batteries, would be eligible”.

Price at the time said that the objective was grid and market stability, and that alternative technologies that met the objective should be included in the scheme. Garnaut warned at the time, and since, that it one of the details to watch. His concern has been justified.

Ostensibly, the scheme has been designed to as generators are not shut down without replacement, and will also encourage other technologies such as pumped hydro and solar thermal.

The proposed legislation says that eligible South Australia generators will be able to create a certificate for each megawatt-hour of eligible electricity. The price of these certificates will be capped at $50/MWh, but suggest a new certificate market worth around $225 million a year for the gas industry.

The target rises to 50 per cent by 2025, which means that most – or all – of added capacity will have to be accompanied by storage. This has major implications for new and existing wind and solar farms if battery storage is not allowed.

The draft plan for the scheme has been released for consultation and says it expects these certificates will be capped in price at $50/MWh, but it expects the increased competition from new entrants will result in lower prices for consumers.

“Existing and new generators will be eligible to create certificates. Retailers will be compelled to purchase and acquit certificates to meet the energy security target,” the government says.

“The price of certificates will be determined by supply and demand factors, but is effectively capped at $50 per certificate. Retailers may recover the cost of purchasing certificates from customers through their retail electricity prices.”

Despite this added cost, the government expects the scheme will result in lower wholesale electricity prices because of the increase in competition from local dispatchable generation. “This should offset any cost recovered by retailers from consumers,” it says.

South Australia has long been victim to a wholesale market dominated by just two or three major generators. That, and its long reliance on increasingly expensive gas, has caused it to have the highest wholesale prices in the country at times, although Queensland, which also suffers from a lack of market players, had higher costs earlier this year.

The key is the ability of new generators to meet the guidelines. Scenarios from the Australian Energy Market Operator suggest that if all projects go ahead, the state will be host to wind and solar farms to prove more than 80 per cent of its demand.

But that won’t happen, or the output will have to be seriously curtailed, if battery storage is not allowed.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Giles Parkinson is founder and editor of Renew Economy, and is also the founder of One Step Off The Grid and founder/editor of The Driven. Giles has been a journalist for 35 years and is a former business and deputy editor of the Australian Financial Review.

Phase and frequency control is something that digitally controlled inverters are really good at. It’s a matter of programming and configuration, or mis-configuration, as has been the case in SA. Surge capability is a matter of sizing the inverters adequately.

If the SA government doesn’t lead in battery storage (really, storage of all kinds), the customers will, particularly as energy prices will have to rise, making batteries a no-brain option almost immediately.

Behind the meter batteries will become increasingly present and could be a major contributor to stability, provided the policy and rules are appropriate. Little chance of this if the SA government is going to stick its head in the sand, leaving its backside exposed for a good kick.

Mike Shurtleff 2 years ago

“Pumped hydro is still ok.” Very much ok …particularly for longer term dropouts in wind. Batteries are clearly a great solution for daily storage of Solar PV and use in evening and at night. This battery situation will come around. Stupid decision.

“Phase and frequency control is something that digitally controlled inverters are really good at.” EXACTLY! “Surge capability is a matter of sizing the inverters and batteries adequately.” SPOT ON! “If the SA government doesn’t lead in battery storage (really, storage of all kinds), the customers will, particularly as energy prices will have to rise, making batteries a no-brain option almost immediately.” Yep, already happening! Are they clueless or what?

Nicely written! Thank you! mike

MaxG 2 years ago

Welcome to the land of politicians and their utter stupidity… Stories like these confirm my approach of having gone self-sufficient in energy generation. 12kW/h in panels, and 20kWh battery — and I am loving it. Price stability, no blackouts, no brownouts, frequency stability, voltage stability at actually 230V. 🙂

Mike Shurtleff 2 years ago

…as I was just writing. Hadn’t read yours yet.

Robin_Harrison 2 years ago

The political puppets have been got at. Same old, same old.

ben 2 years ago

That’s what it looks like. I’m sure a certain Adelaide based gas producer would have been holding high level discussions.

sean 2 years ago

The problem with making prescriptive legislation, is you end up with some strange results.

The legislation asks for inertia. It specifies that the pay rate is $50/mwh. It doesnt state the timeframe for the inertia to be provided.

a 1w 3phase motor attached to a battery storage system would fit the criteria, and would allow the operator of a battery storage system to claim the entire capacity of the batteries at very little extra cost.

Even if the criteria were changed to include maximum power, it may still be worthwhile to pump power through an electric motor, just to qualify for these payments.

Hopefully the legislators will stop raising questions of corruption and incompetence by prescribing a particular technology.

Just_Chris 2 years ago

I suspect that there is a detailed requirement listed somewhere in the documents – that detail will likely be written to exclude a battery + a flywheel option. The detailed requirements IMO will be written from the specification sheet of the states gas turbines and perhaps the new solar thermal plant.

In my opinion this, like most legislation written around the power industry, is about saying one thing and doing another. If the SA government had come out and said that they were going to give money to the gas turbines in the state to keep them afloat all hell would have broken loose. As it is written they are paying for “grid stability” not paying gas turbines to stay in business. This is clearly non-sense, wind turbines can provide “grid stability” as can batteries and the states inter-connectors. So why are they paying for the gas turbines? It appears pretty simple to me, without the gas turbines SA would not be able to power its self. Yesterday there was 0 MW of wind being generated. Even with the inter-connector at full power there is no chance the state could power its self without the gas turbines when the sun went down. SA is going to build one of the biggest batteries in the world – 100 MWh which is fantastic, but it can provide less than 10% of the states power for 1 hour. It will be years before we have enough renewables to fill the gap those gas turbines fill right now. It’s taken us 7 years to get to (nearly) 6 GW of installed solar in Australia if we followed the same path with batteries and had 6 GWh’s of battery storage in 7 years, IMO, we wouldn’t have enough storage to be totally free of fossil generation. Even if all that storage was in SA you’d still only have 6 hours of operating at 1.4 GW which is what the states gas turbines are currently putting out, you would also need to be able to charge them which could mean doubling the states demand for 2 hours or so – probably either side of the solar peak in a decades time when the solar peak exceeds the states demand.

This is not negative – we are transitioning to a renewable energy future but it can’t all happen at the same time and the lights stay on. I want things to happen faster but to be honest SA is moving quicker than pretty much anywhere else in the world.

sean 2 years ago

SA, and AEMO can already dictate that gas plants turn on. gas turbines already have a monopoly on SA electricity when there are no renewables present, and can price themselves at $14/kWh if they like.

this makes me wonder why there has been lobbying for “real” inertia. it obviously isnt financial, as there is great scope for financial reward already available by bidding higher. so why waste huge amounts of effort to get your business legislated?

You did point out a flaw in my hypothetical grant application, if i have a 3 phase motor attached to the grid, i dont need to run it with an additional motor back to back, i can just run it electrically by dumping the inverter onto the grid and powering the motor that way so i’m only paying for friction losses on one motor. to reduce friction losses further, and increase responsiveness, the flywheel could simply be the shaft of the motor.

Just_Chris 2 years ago

Flywheels are used for frequency regulation in a number of places. King island in Australia uses a flywheel on the front of a Diesel engine, for instance. In the king island case the flywheel is connected to the motor/generator. In normal operation the Diesel engine is disconnected from the motor. The flywheel is kept spinning by supplying the motor with a small amount of power, it remains synchronised with the grid. If the frequency drops the engine kicks in and provides extra power to the system. I wish I understood frequency regulation better but my understanding is that the problem is when things get out of time with each other which is often caused by two systems with different response times trying to correct each other. I am sure there are solutions but I suspect those who understand enough to say something sensible will be drowned out by those looking to play games.

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Peter 2 years ago

What do the legislators think is the difference between “real” and “synthetic” inertia? I do not believe there is any difference at the inverter or alternator terminals.

Mike Shurtleff 2 years ago

Actually, “real” inertia is from synchronous generators and is responsible for oscillations that can lead to additional shutdowns when a large load is suddenly dropped, like a large power line interconnect going down in a wind storm. I think “synthetic” inertia can be implemented in a such a way as to actually help prevent those synchronous generator oscillations from happening. Batteries and inverters on Wind turbines and Solar farms can react to sudden surges of power demand far more rapidly and stably than old style synchronous generators. I think the dinosaurs have this backwards. The point is the incumbent utilities can continue to abuse the system and abuse their customers. That’s ok by me. Retribution is coming. Solar PV + Batteries for residential and commercial off-grid use will continue to increase in popularity. This kind of screw the customer crap won’t last much longer. Does boggle the mind that they still think they can get away with this nonsense.

Peter 2 years ago

Precisely. I did not elaborate, but I was thinking of the positive attributes of software control of the inverter, rather than the negative aspects of the dynamics of the system. One possible concern is that speed of response contributes to the loop-gain of the system, so there may be interesting research and development aspects to the problem.

The other possibility is that sudden changes on demand can be propagated much more quickly as data rather than by waveform, and so react in anticipation.

Ian 2 years ago

So the smart money would install a dirty great PV farm near a suitable hill and build a pumped hydro system right next door. RECs from the Feds and Certs from the state.

Ian 2 years ago

Giles, we feel for you. What a kick in the Guts. One step forward, two steps back. The difference between liberals and labor is that the liberals are openly antagonistic to renewables. Labor is far more passive/aggressive. Paying lip service to renewables but king-hitting the transition with moves like this.

The liberal’s lack of forward thinking is real inertia. Labor’s lack of forward thinking is synthetic inertia. Time to get rid of both. They are different sides of the same coin.

neroden 2 years ago

OK, I love the way you wrote this.

laura 2 years ago

As always the devil is in the detail. I can understand what they are getting at there: – synthetic inertia usually works to a point until you hit the inverter rating. A synchronous generator’s inertia is governed by physics, not the machine rating. I guess they are aiming at extreme events where this effect will be significant, such as their system black event recently. – batteries and wind turbines can provide fault level but usually (unless you pay more for it) the fault current is about the rating of the generator. When fault current is too low it is hard to clear faults – fault current looks like load current. A synchronous generator will provide several times it’s rating for a few hundred ms after a fault.

the real questions are in the detail – how do they define a synchronous generator? for instance if i were a wind/solar developer I could install a synchronous condenser instead of a statcom for reactive support. When there is a fault it will act like a synchronous generator. Is this acceptable to be ‘synchronous’? How big does the condenser need to be compared to plant size? What if i don’t bother with the wind or solar generation and just install a synchronous condenser? Then i have provided the services they require but have not generated energy. Similarly what if i build a gas plant but put a clutch between the generator and the turbine?

I think the definitions need to be set so they get the outcome they want rather than selecting a technology. It would be better if they defined the services they want functionally (‘a response that looks like this to an input like this’) rather than settling on a technology (‘it must be physical inertia’). Whenever you write rules in a particular way manufacturers and developers will meet the letter rather than the intent of the law.

neroden 2 years ago

So throw in a flywheel. A battery-powered flywheel. there’s your real inertia.

Tilleul 2 years ago

Inertia is something you don’t want in a generator, because of inertia TSO are often paying downward regulation and upward regulation at the same time because slow thermal powerplant will take ages to react. You want precise droop control as only power electronic can give you… What will be the next move ? Ask telcos to go back to analog signals ? Anyway ten years ago Enercon introduced a hybrid storage with batteries combined with flywheel so you could get a battery feeding a flywheel with high power but near zero energy content… Very stupid way of getting connected to the grid as you won’t get any of the smartgrid capabilities of inverters but the law is the law…

Peter F 2 years ago

I think mechanical inertia of the turbine and thermal inertia of the heat engine are two different issues. Mechanical inertia does help with fault currents but thermal inertia as you say is almost universally a pain for plant and system managers

Tilleul 2 years ago

I was talking about mechanical inertia. You can look at Peter Farley’s recent article “Gas could be the most expensive, least reliable path to grid stability”, he did a great job at explaining the physics behind it. Inertia is like baseload : it’s not a feature, it’s a bug.

Craig Allen 2 years ago

Do flywheels provide synchronous inertia?

Just_Chris 2 years ago

Depends on the flywheel I assume normally yes but I geuss in some instances they maybe configured in the same way as a wind farm where you generate AC convert to DC and then back to AC. That shifting from AC to DC and back again means the generator can spin at what ever speed you like and you can set the frequency electronically but it means your inertia and fault current is limited by the size of your inverter.

Mick 2 years ago

Not inverter coupled flywheels. Some can though

solarguy 2 years ago

SA plans have always been more RE and still is, they are also going to award a tender soon for an 100MW battery. There are also plans for a big PV farm with battery storage and many more projects to come. This real inertia thing is contrary to those plans, so surely this is a misunderstanding, because if it isn’t, then world truly has gone mad.

Macabre 2 years ago

We need another tweet from Elon Musk.

neroden 2 years ago

This is absolutely ridiculous. Attach a battery to a flywheel and you have real inertia.

Someone needs to investigate who’s bribing the Government to put ridiculous anti-battery terms in their legislation.

And meanwhile… get yourself home batteries, because you can’t trust the crooks in the government.

Jon 2 years ago

The South Australian government has essentially closed the door on new renewable energy projects. They may as well put up a sign saying “NO MORE CHEAP RENEWABLES PLEASE”. The EST has been proposed as a “synchronous only” scheme right from the outset but unfortunately the rhetoric from the SA govt has led us all to believe that the implementation would support renewables and batteries. Clearly not! The 50% synchronous generation target basically means that no more PV and wind can be built. There is no new load coming to SA anytime soon yet there will be 1500GWh of additional local generation, primarily from gas fired generators. This is equivalent to about 700MW of new solar. They are also adding further limitations on renewables through new ESCOSA and Office of Technical Regulator (OTR) standards…..soon to be released. The craziest part is that the EST does not guarantee that inertia will be available when it is required, only that retailers buy a certain amount of “synchronous” generation over the course of a year. At least batteries provide an always on solution when it comes to fast frequency response. The SA govt policy is all about populist politics – SA energy for South Australians! But in the end it will end up costing more and driving out private investment.